Ashraf AboArafe
Is India really a “tariff king”? The answer, according to Dr. Mohan Kumar—former Indian Ambassador and Director General of the Jadeja Motwani Institute for American Studies—is far more nuanced than the popular label suggests.
Tariffs in India serve two fundamental purposes in a developing economy: protecting domestic industries and generating government revenue. While India did impose high tariffs in the 1980s, the landscape shifted after the 1991 economic reforms and the Uruguay Round negotiations leading to the World Trade Organization (WTO). Since then, the overall direction has been a steady reduction in tariffs.
It is important to distinguish between two kinds of tariffs: applied tariffs—the duties actually collected at the border—and bound tariffs, which are the maximum legal ceilings set under WTO commitments. India’s trade-weighted applied tariff—a more accurate measure of real-world trade—is a moderate 4.6 percent, even though the simple average tariff stands higher at 15.98 percent. This evidence alone challenges the idea of India as a “tariff king.”
The sectors where tariffs remain higher—mainly agriculture and automobiles—reflect strategic priorities. Roughly half of India’s population depends directly or indirectly on agriculture, which remains largely unmechanized and small-scale. Average agricultural tariffs hover around 33 percent on items like meat, dairy, fruits, and cereals. Yet these rates are comparable to, or even lower than, those in developed economies such as the EU (up to 261 percent), Japan (up to 298 percent), and South Korea (up to 800 percent on vegetables). Likewise, higher tariffs on automobiles safeguard employment in this critical sector.
For non-agricultural goods, India’s tariffs are competitive by global standards. Electronics, IT hardware, semiconductors, and computers face rates between 0–10.9 percent, aligning with or undercutting peers such as Vietnam, China, and Indonesia.
When viewed globally, India’s simple average tariff is well within the norms for developing countries—comparable to Bangladesh (14.1 percent), Argentina (13.4 percent), and Türkiye (16.2 percent). The balance reflects a deliberate policy: safeguarding livelihoods while promoting trade openness.
Dr. Kumar concludes that India’s tariff policy is strategic, measured, and rooted in economic realities. Agriculture, dairy, and automobiles are protected to preserve livelihoods, while other sectors enjoy moderate tariffs that encourage integration into global markets. India’s approach is less about closing doors and more about building a resilient bridge between domestic needs and international trade.
* Source: Newsweek..
